Archive for the ‘Joinder of Parties Post-petition’ Category

Target Wins Rehearing of IPR Joinder Decision with Expanded Panel

Friday, February 13th, 2015

Last fall, the Patent Trial and Appeal Board (PTAB or Board) interpreted the IPR joinder provision, 35 U.S.C. § 315(c), to require joinder requests by a non-party to an ongoing proceeding.  (Target Corp. v. Destination Maternity Corp., IPR2014-00508 and IPR2014-00509.)  Prior to that decision,  the Board had interpreted § 315(c) to allow for issue joinder by the petitioner of the original proceeding (see, for example Microsoft v. Proxyconn, IPR2013- 00109).  Of course, joinder was decided on a case-by-case basis, but had not previously been denied because the request was made by the petitioner of the original proceeding.

Target Corp. filed rehearing requests in both affected IPR proceedings in an effort to have the Board reconsider its interpretation of  35 U.S.C. § 315(c) with an expanded panel.  Target’s arguments are quite clearly stated in its Motion for Rehearing.  The Board granted Target’s rehearing request.  In a 4:3 decision,  the majority agreed that § 315(c) had been overly narrowly interpreted in the prior decision:

Turning now to the merits of the Request for Rehearing, the contention at the heart of Petitioner’s request for rehearing is that the denial of its Motion for Joinder was “based on an erroneously narrow interpretation of 35 U.S.C. § 315(c).” Paper 22, 1. We agree with Petitioner.

The majority read § 315(c)’s reference to “any person who properly files a petition under section 311” in conjunction with § 311’s requirement that the petition filer not be the patent owner, to broadly interpret § 315(c) to include any person except the patent owner.  This interpretation is at odds with the dissent’s analysis, which reads § 315(c)’s reference to “may join as a party” to literally require a new party for joinder:

The statute under which Petitioner seeks relief provides:

(c) JOINDER.—If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

35 U.S.C. § 315(c) (emphasis added). The statute does not refer to the joining of a petition or new patentability challenges presented therein. Rather, it refers to the joining of a petitioner (i.e., “any person who properly files a petition”). Id. Further, it refers to the joining of that petitioner “as a party to [the instituted] inter partes review.” Id. Because Target is already a party to the proceeding in IPR2013-00531, Target cannot be joined to IPR2013-00531.

While the majority decision does align with panel decisions on joinder prior to Target, one must ask whether this issue is finally resolved by this expanded panel decision.  For example, what happens if another panel does not follow this interpretation § 315(c)?  Or suppose this decision is appealed; would the Federal Circuit reverse a Board decision on joinder as it relates to institution given its recent interpretation of 35 U.S.C. § 314(d) in In re Cuozzo Speed Technologies? (“We conclude that § 314(d) prohibits review of the decision to institute IPR even after a final decision. . . . Section 314(d) provides that the decision is both ‘nonappealable’ and ‘final,’ i.e., not subject to further review. 35 U.S.C. § 314(d).”)  Would a Federal Circuit appeal have to be in the form of a petition for writ of mandamus?  If so, how would that square with the mandamus decisions in In re Dominion Dealer Solutions, LLC, 749 F.3d 1379, 1381 (Fed. Cir. 2014)(mandamus relief not available to challenge the denial of a petition for IPR) and in In re Proctor & Gamble Co., 749 F.3d 1376, 1378–79 (Fed. Cir. 2014)(mandamus relief not available to provide immediate review of a decision to institute IPR)?

 

 

Target Corp. Requests Rehearing of Denied IPRs by Expanded PTAB Panel

Friday, October 17th, 2014

October 17, 2014

Last month, the Patent Trial and Appeal Board (PTAB or Board) interpreted the IPR joinder provision, 35 U.S.C. § 315(c), to preclude joinder requests by an existing party to an ongoing proceeding.  (Target Corp. v. Destination Maternity Corp., IPR2014-00508 and IPR2014-00509.)  In these recent decisions, the Board decided that § 315(c) requires “party joinder” and not only “issue joinder.”  Interestingly, before this interpretation was announced the Board had allowed “issue joinder” without requiring joinder of a new party to the proceeding (Microsoft v. Proxyconn, IPR2013- 00109), and after this interpretation was announced at least one panel of the Board applied an analysis that did not appear to adopt this new interpretation (Microsoft Corp. v. Enfish LLC, IPRs 2014-00574, -00575, -00576, and -00577).

Last week, Target Corp. filed rehearing requests in both affected IPR proceedings in an effort to have the Board reconsider its interpretation of  35 U.S.C. § 315(c) with an expanded panel.  Target’s arguments are quite clearly stated in its Motion for Rehearing, some of which include:

  • The AIA was implemented for broad remedial purposes to improve patent quality and to provide a more efficient system for challenging patents that should not have issued.
  • These broad remedial purposes of the AIA empower the PTO to administer IPR proceedings in a way to reduce duplication of efforts and costs.
  • Laws pertaining to patent quality which are “remedial in nature, based on fundamental principles of equity and fairness” can be construed liberally.
  • The PTAB should interpret the joinder provision liberally to allow for consistency of prior decisions, and reduce gamesmanship in parallel district court litigation.

On that last point Target’s motion states:

Target’s Joinder Motion sets forth the unique facts of this case, which reveal that a significant prior art reference long known to the patent owner was withheld from Target in the parties’ parallel district court litigation until several weeks after Target’s one-year deadline under 35 U.S.C. § 315(b). (Paper 3, at 1-6.) Under the Board’s decision here, a patent owner in parallel litigation with a petitioner can readily subvert the purposes of the AIA, see supra Part II.A, and the IPR process by withholding any significant prior art it may be uniquely aware of, or additional asserted claims, until after the petitioner’s one-year deadline under § 315(b).

Of course, joinder motions cannot be filed any time after institution of the prior proceeding — they must be filed within a month after the date of institution of the IPR for which joinder is requested:

§ 42.122 Multiple proceedings and Joinder.

(b) Request for Joinder. Joinder may be requested by a patent owner or petitioner. Any request for joinder must be filed, as a motion under § 42.22, no later than one month after the institution date of any inter partes review for which joinder is requested. The time period set forth in § 42.101(b) shall not apply when the petition is accompanied by a request for joinder.

However, in many cases the possibility of joinder of issues to a petitioner about a year after service of the lawsuit is still quite valuable to the petitioner and has been used to assert improved grounds and to attack newly asserted claims. (Microsoft v. Proxyconn, IPR2013- 00109.)

It will be interesting to see what the PTAB decides to do in Target’s IPR proceedings.  More importantly, it would be a great thing if this rehearing would result in  consistent joinder practice across panels in the future.

Patent Office Board Takes a Bite out of Apple’s IPR Challenge of VirnetX Patents

Thursday, December 19th, 2013

In  mid-2013 Apple filed seven inter partes review petitions to challenge four VirnetX patents.  Recently, the Patent Trial and Appeal Board (the Board) denied all seven inter partes review (IPR) petitions.  This outcome demonstrates the Board’s current interpretation of the one-year bar applied in IPR proceedings and its position on joinder of petitions.

Apple’s Interpretation of the One Year Bar

Apple disclosed that its petitions were filed more than a year after service of a complaint asserting infringement of the subject patents, and understood that the petitions might be challenged depending on the Board’s interpretation of 35 U.S.C. § 315(b) (the statute barring IPR petitions filed after certain assertions of infringement):

Petitioner notes it was previously served with a complaint asserting infringement of the ’135 patent in August of 2010, which led to Civil Action No: 6:10-cv-417. During that action, the District Court established an additional civil action, Civil Action No. 6:13-cv-00211-LED, on February 26, 2013 (also pending in the Eastern District of Texas). The August 2010 complaint does not foreclose the present petition, as Patent Owner served a new complaint on Petitioner asserting infringement of the ’135 patent in December of 2012.

Apple Inc. v. VirnetX, Inc., et al., IPR2013-00348, Paper 1 (June 12, 2013), at p. 1 (emphasis in original).  Similar disclosures can be found in the other six related petitions:  IPR2013-00349, -354, 393, -394, -397, and -398.

Apple anticipated that the 2010 complaint service might cause a concern and argued that the 315(b) bar should not apply:

Petitioner submits this conclusion [that the petitions are not barred] is compelled by the plain language of § 315(b). Notably, § 315(b) does not specify a one-year deadline that runs from the date of the first complaint served on a petitioner. Rather, it states “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” Thus, a petition filed within 1 year of the date any complaint alleging infringement of the patent is served on a petitioner is timely under the plain statutory language of § 315(b). This is also the only reading of § 315(b) consistent with the statutory design. Congress designed the IPR authority to be option to contest validity of a patent concurrently with district court proceedings involving the same patent. A timely filed IPR proceeding in any action a patent owner elects to commence is perfectly consistent with this statutory design.

Reading § 315(b) in this manner also is the only way to effectively foreclose gaming of the system by a Patent Owner. Indeed, if § 315(b) were read to foreclose IPR proceedings in a second, independent action for infringement a patent owner elected to commence, it would unfairly foreclose use of the IPR system. For example, a patent owner could assert irrelevant claims in a first action, wait a year, and then assert different claims in a new action that do present risks to a third party. In this scenario, the patent owner would foreclose legitimate use of an IPR to contest validity of the patent claims asserted in the second action based on the third party’s reasonable business decision to not dispute validity of irrelevant claims in the first action. Rather than attempting to decipher which scenarios would be improper, the Board should follow the plain meaning of § 315(b), and find a petition timely if it is filed within 1 year of the date any complaint alleging infringement of the patent is served on a Petitioner.

Finally, reading §315(b) to foreclose this petition based on the August 2010 complaint would be particularly unjust in this case. The 1-year period following service of the August 2010 complaint expired before it was possible to submit an IPR petition – petitions could only be filed on or after September 16, 2012.

Id., Paper 1 at pp. 2-3 (emphasis in original).

But Apple had one more card to play that could avoid the entire issue of the 315(b) bar:  a request for joinder with another IPR proceeding challenging the same patent.

Apple’s Joinder Request

Apple knew that if it could successfully join another IPR proceeding, such joinder under 35 U.S.C. § 315(c) (and  37 C.F.R. § 42.122(b)) would not be subject to the one year bar under the last sentence of 35 U.S.C. § 315(b).  Apple filed its Motion for Joinder on August 21, 2013, requesting joinder to IPR proceedings by New Bay Capital, LLC challenging the VirnetX patents:

Pursuant to the authorization granted by the Panel on August 14, 2013 in Paper No. 6, Petitioner Apple Inc. (“Petitioner” or Apple) moves to have the Board join IPR proceedings IPR2013-00348 & -00349 to each other and with IPR proceeding IPR2013-00375 filed by New Bay Capital, LLC (“NBC”), each of which concerns U.S. Patent No. 6,502,135.

Id., Paper 7 at p. 1.

Apple submits that joinder of the proceedings is fully warranted. See IPR2013-00004, Paper 15 at 4; Dell v. Network-1 Security Solutions, Inc., IPR2013-00385, Paper 17 at 2-3. Joinder is proper under the statutory design of inter partes review, will simplify and reduce the number of issues before the Board and will enable streamlined proceedings (i.e., one coordinated proceeding instead of three separate proceedings). In addition, the Board can manage the joined proceeding in a way that does not impact scheduling or conduct of the proceedings. See Motorola Mobility LLC v. Softview, LLC, IPR2013-00256, Paper 10 at 2-3.

Id., Paper 7 at p. 3.

So, it seemed like Apple had two independent avenues for potential institution of IPR:  (1) an interpretation of 315(b) that would result in no bar of the petitions, and (2) joinder with ongoing IPR proceedings filed by New Bay Capital, regardless of any potential 315(b) bar.

New Bay Capital Terminates its IPRs

On November 6, 2013, New Bay Capital filed unopposed motions to terminate its IPRs (IPR2013-00375, -376, -377, and -378):

Pursuant to 37 C.F.R. §42.73(b)(4) and the Board’s Order of November 1, 2013, Petitioner New Bay Capital, LLC (“New Bay”) moves to terminate the present inter partes review proceeding. Termination is appropriate because New Bay is abandoning this contest, VirnetX does not oppose and a trial has not been instituted.

The Board granted New Bay Capital’s motions and terminated those IPR proceedings on November 12, 2013.

Apple’s IPR Petitions Denied

The Board reviewed the facts of the complaints served on Apple in the past and decided that the 2010 complaint served on Apple barred its IPR petition under 315(b).  The Board also dismissed Apple’s joinder request because the Board had recently terminated the New Bay Capital IPRs:

The timeliness limitation of 35 U.S.C. § 315(b) does not apply to a request for joinder. As such, Petitioner filed a motion to join the instant proceeding with another proceeding, IPR2013-00375, pursuant to 35 U.S.C. 315(c). See Paper 7 (“Petitioner’s Motion for Joinder of Proceedings”). Granting the motion would obviate the time bar under 35 U.S.C. § 315 (b). The IPR2013-00375 proceeding, however, has been terminated. New Bay Capital, LLC v. Virnetx, Inc., IPR2013-00375, Paper 16 (PTAB Nov. 12, 2013). Accordingly, Petitioner’s motion for joinder is dismissed.

Id., Paper 14 at p. 5.

So both of Apple’s avenues for institution of trial in these seven IPR petitions were blocked by the Board.

Reconsideration Still an Option

Even though Apple’s seven IPR petitions were denied, Apple still has the right to request reconsideration and it remains to be seen if it will file requests for rehearing.  Such requests have historically proved to be unlikely to be granted.  Other Petitioners have sought additional avenues for institution that will be discussed in a future post.

Joinder in Patent Office Proceedings Clarified by PTAB

Monday, June 10th, 2013

Several posts ago we explored how the Board perceived joinder of a subsequent petition filed by a petitioner to an ongoing proceeding.  A recent ruling by the Patent Trial and Appeal Board (PTAB) clarifies how the Board views joinder of new parties to pending post-grant proceedings.  U.S. Bancorp filed a covered business method petition on March 29, 2013 to challenge the validity of U.S. Patent 6,625,582, owned by Retirement Capital Access Management Company LLC (Retirement Capital).  After filing that petition, and before a preliminary patent owner response was filed by Retirement Capital, U.S. Bancorp requested permission to file a motion for joinder of additional parties to that proceeding (CBM2013-00014).  According to U.S. Bancorp, after its petition was filed, two additional parties in related lawsuits pending in Delaware wished to join the case as petitioners and real parties-in-interest.

The Board identified this request as a case of first impression, because in no other prior proceeding had a party to the proceeding requested joinder of other new parties post-petition.  The PTAB distinguished one other example provided by U.S. Bancorp, because in that proceeding (CBM2013-00005) the parties were all petitioners at the time of filing the petition.

The PTAB denied authorization for U.S. Bancorp to file its motion to join these parties, stating:

The statutory framework provided by Congress thus contemplates the situation where a party might wish to join an additional petition with an already instituted proceeding, and provides a way for that party to do so. The statute requires the filing of “more than 1” petition for joinder to take place. Furthermore, the statute requires that the additional petition “warrants the institution of a . . . review.” The corresponding USPTO regulation similarly specifies that “[j]oinder may be requested by a patent owner or petitioner.” 37 C.F.R. § 42.222(b) (emphasis added). Thus the statute and corresponding regulation are directed to joining of proceedings not parties.

(CBM2013-00014, Order of June 5, 2013 at p. 3.)

One takeaway from this decision is that to join parties to an existing proceeding it may be necessary to file additional petition(s) with a request for joinder.  The request for joinder may be made as a motion under 37 C.F.R. § 42.22 pursuant to 37 C.F.R. § 42.122(b) for inter partes review or pursuant to 37 C.F.R. § 42.222(b) for post-grant reviews and covered business method reviews.